With POS Paper Supplies Vanishing, E-Receipts May No Longer Be Optional
Written by Frank HayesMaybe digital receipts and coupons are something you need to start promoting—and fast. The second-largest supplier of POS receipt paper, Germany’s Koehler, still plans to stop shipping paper to the U.S. in April, after a December ruling by the Commerce Department that will increase tariffs by more than 70 percent. That could translate into shortages and will almost certainly mean higher prices for thermal paper, which is used in most chains’ POS printers.
U.S. and Chinese paper mills say they will eventually fill the shortfall from the U.S. exit of Koehler, which has been providing about 40 percent of POS paper. But in the meantime chain execs may be expecting IT to keep stores from running out of paper. Strange as it sounds, it is IT’s problem—and the second-easiest option is digital receipts.
The easiest and most obvious fix is to print less on each receipt. Chains have been running a lot more paper through those POS printers in recent years (on a recent trip to one chain, a two-item cash purchase generated 17 inches of receipts and coupons). The problem: Receipts now contain both marketing pitches and legal boilerplate, including disclaimers and return/exchange policies, along with more transaction details than in the past.
As a result, just cutting back what’s printed on the receipt now involves pushback from Marketing and an even tougher fight from Legal. Marketing is sure its offers and coupons are essential, but Legal can cite cases that were lost because of a missing disclaimer. Once those interdepartmental fights are resolved, you’ll still need to test and push the new receipt format to store POS systems—and, if possible, delay going live with it until it’s clear receipt paper is either too pricey or too scarce.
Your other options: getting customers to voluntarily leave without a receipt—Sears (NASDAQ:SHLD) and Kmart have offered that for a while—or ramping up your digital receipt efforts. If you’re already doing digital receipts as part of a loyalty program, flipping the policy from “can receive E-mailed receipt” to “will E-mail receipt unless otherwise requested” may be enough to cut paper usage significantly.
You may still want to have cashiers hand each customer a barcoded mini-receipt, so if buyer’s remorse kicks in before the E-mail receipt arrives they’ll still be able to do a return. That also reduces concerns about shoplifting and fraud—at least customers will have something to show LP if there’s a question at the door. That won’t completely cut out paper receipts. But cutting them by 40 percent? That’s doable.
-Marc
March 18th, 2013 at 9:47 am
First, markets are dynamic not static as your article suggests. With the departure of one competitor others enter to take its place. There have been no shortages of thermal receipt paper and there will not be any in the future. Markets don’t work that way. Second, Koehler is leaving the market because they DEFRAUDED the US Government. They purposely lied and withheld information from the US Government to artificially lower the selling price of thermal receipt paper in the US in an effort to financially hurt domestic producers. That is a fact proven repeatedly in the court. Nobody likes a cheat. The price of thermal paper is returning to its true market clearing level now that Koehler has been prosecuted and found guilty. Regardless of the industry we compete, we all can agree that playing by the rules is a prerequisite, and when you don’t the responsible party needs to be prosecuted to protect those who are playing fairly.
March 18th, 2013 at 11:18 am
Beyond the issue of whether or not there is or will be a thermal paper shortage … this post raises a number of valid considerations and obstacles for moving to totally digital receipts. I too have experienced the overly long receipts that hawk everything from my earned gas price discounts to a full-blown application for the retailer’s co-branded credit card. Recently I experienced a FFS (fat finger syndrome)moment when an eager young clerk in a popular high-tech retail outlet keyed “n” vs. “m” in my email, and the receipt never arrived. I then had to call back and get a copy re-sent (once they found the transaction). I prefer to be given the option of getting both digital and on-site receipts such as a department store chain I frequent allows. That way, I can determine my comfort level on a case-by-case basis. And then there are the cases where you need a “gift receipt”. How to best approach this will remain a topic of much discussion between the various constituencies.
March 24th, 2013 at 1:20 am
No paper receipt, no sale. I don’t give email or other personal info at the register. I left a full cart with 14 xbox games, two hard drives, flight control panel, and several dvd’s at best buy this christmas because the check-out girl required my phone number to complete the transaction for a cash sale. I also left a over loaded cart at toy-r-us with almost $400 in toys because they demanded a phone number and zip code to complete the cash transaction. I didn’t get angry, I just walked out and shopped at wal-mart and newegg.com.
March 25th, 2013 at 9:43 am
Is the paper supply shortage real? Yes, but only temporarily as market production will correct itself with others filling the void in time.
I’m with Bill. I’m not giving out my email address to every retailer, nor to even 40. It’s very rare that I would give it out. Ditto for cell phone number, which stores have been increasingly asking for as a faster and less error prone alternative to typing an email address.
Other factors:
As more merchants are moving to digital payment solutions that enable remote updates to receipt messaging, we’re likely to see an overall net increase in paper receipt tonnage, not less.
On the flip side, new technologies are enabling buyers to purchase online or make invoice payments online, and then pick up in the store.
Will all these factors, including email receipts, have an impact on overall receipt print volume? I think ‘net neutral’ might be optimistic.